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Hydrogen Industry Leaders eMagazine December 2023

ISSUE 19

COMING UP 2

ISSUE 19

Academic Collaboration in the Emerging Hydrogen Industry

Demystifying the Hydrogen Business Model for Electrolysis

How Can Hydrogen Accelerate the Decarbonisation of Rail?

How to Negotiate a LongTerm Global Commitment to Hydrogen

Podcast Write Up: East Midlands Hydrogen

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FOREWORD “HOW CAN HYDROGEN ACCELERATE THE DECARBONISATION OF RAIL?”

Message of the Day: Don’t Count Scotland Out of the Decarbonisation Race

As more research goes into reducing hydrogen costs, could Scotland get the hydrogen economy moving? This issue breaks down the movements in legislation, policy announcements and how hydrogen can accelerate the decarbonisation of rail. Additionally, Hydrogen Industry Leaders brings you the general objectives of the latest insights into the renewables market, a demystified outlook on the HBM, and how to negotiate a long- term global commitment to hydrogen. Through our international projects section, we explore the core innovations across the globe, including how research to enhance PEM electrolysis is underway, the acceleration of green hydrogen infrastructure across Africa, the latest developments from the EU, and how Province Resources is developing an 8 GW green hydrogen project in Western Australia. Hydrogen Industry Leaders looks at current hydrogen projects, innovations and policies shaping the hydrogen economy that will undoubtedly lead the way for the future of low-carbon energy.

Floyd March Editor f.march@peloton-events.co.uk Hannah Wintle Multi Media Journalist

International Projects

Chelsea Bailey Multi Media Journalist Olivia Staveley Graphic Designer 3

ACADEMIC COLLABORATION IN THE EMERGING HYDROGEN INDUSTRY

In the lead up to global climate deadlines, universities around the world are uniquely well placed not only to develop the science and innovations behind the energy transition, but to analyse the economics and policies that go hand in hand with achieving net zero. Hydrogen Industry Leaders spoke to Professor Nazmiye Ozkan to explore the role of collaboration between global universities in the emerging hydrogen industry. 4

ISSUE 19

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Over the course of the year, plenty of UK universities have announced projects and research hubs to investigate and demonstrate the potential of hydrogen. In recent months, we’ve heard how Loughborough University is supporting RollsRoyce to research hydrogen’s role in net zero aviation, that Sheffield University is set to produce more green hydrogen than any other UK research centre, and that several universities have received £11 million in funding as part of the UK Hub for Research Challenges in Hydrogen and Alternative Liquid Fuels (UK-HyRES). Certainly, lots of universities are driving forwards the research and innovation surrounding hydrogen in the UK, but international collaboration is another important piece of the puzzle when it comes to achieving net zero on a global scale. In this arena, UK universities are again proving themselves a crucial piece of the puzzle.

HYPT is led in the UK by Cranfield University A recent development in the UK’s global academic collaboration ventures comes in the form of The Global Hydrogen Production Technologies Centre (HyPT). The £14.1 million project will run for five years, and seeks to accelerate net zero hydrogen technologies with the intention of bringing the cost down to approximately $1 per kilogram of hydrogen. HyPT is a collaboration of international universities, led in the UK by Cranfield University in partnership with Arizona State University, the University of Adelaide, and the University of Toronto. The partnership in total spans six countries including Germany, Egypt, UK, USA, Canada, and Australia. Funding for the project was put up by the latter four nations, with UK Research and Innovation (UKRI) allocating £6.2 million in funding to UK partners.

BY HANNAH WINTLE

institutions in different countries interweave under the Center [sic] to work synergistically with the common goal of achieving US$1/ kg and gigatons/year net zero hydrogen production. Cranfield’s role in leading the UK efforts involves liaising with other UK partners, which include Imperial College London, Newcastle University, the University of Cambridge, and the University of Birmingham. Professor Nazmiye Ozkan, Professor in Sustainable Energy Transitions and Head of Centre for Energy Systems and Strategy at Cranfield, said: “Our ambition is to make significant progress to achieve the goal of US$1/kg hydrogen, but to achieve that goal in a responsible manner. “We want to recognise not only the technology itself, but also understand the impacts on the environment, on water resources, et cetera. “So not only will we be making significant progress in terms of developing those technologies, but also recognising how they interact with the economy and with society and the environment, and how we could take into account those constraints or issues or challenges in the process of technology, scaling and deployment.

“HYDROGEN IS AN IMPORTANT ASPECT ACROSS THE UNIVERSITY, AND I’M PLEASED THAT OUR WORK WITHIN THE CENTRE IS RECOGNISED INTERNATIONALLY.” PROFESSOR NAZMIYE OZKAN, CRANFIELD UNIVERSITY

According to Arizona State University, the US lead in the project, the project will see ‘researchers with diverse expertise from many 5

ACADEMIC COLLABORATION IS KEY IN THE EMERGING HYDROGEN MARKET With a multitude of research hubs and universities around the globe all seeking answers to the same questions, combining international expertise is a vital aspect in expediting the successful journey to net zero.

Additionally, universities have unique access to the next generation of industry leaders, and involving students in their projects ensures that skills are progressing alongside international developments.

Professor Nazmiye explained that no one party has the silver bullet in the net zero challenge, and that bringing universities together is essential.

Professor Nazmiye also commented on the impact projects such as these could have on developing the global hydrogen market. She said: “We are working with our funders in close collaboration and we will be appointing an advisory board where we’ll be sharing our emerging insights as we go along so that they could be translated into industry.”

She explained: “We really need that collaborative thinking. Different research teams coming together and learning from each other and challenging each other is really the key. “The project is a five-year investment, and we’ll be having student exchanges, and research exchanges across the countries and webinars between research teams. “There will be lots of interactions in terms of what is happening in the US versus in Imperial College versus in University of Adelaide in Australia or in Toronto. “So that collaboration I’m hoping will facilitate us to get there sooner than if we were all doing our individual parts.” 6

The role of universities in scientific breakthrough will continue to be a vital ingredient in exploring hydrogen’s potential and reaching net zero, and while climate targets may vary from country to country, creating networks for academic collaboration is key. Ultimately, it is the sharing of insights and cultivating of partnerships around the world that will facilitate the speed necessitated for a successful global energy transition.

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ANY DEVELOPMENTS AND BREAKTHROUGHS ARE SHARED GLOBALLY ACROSS THE COUNTRIES. 7

ISSUE 19

Demystifying the Hydrogen Business Model for Electrolysis Due to the nascent nature of the green hydrogen economy, with just 700 MW electrolyser capacity installed across the globe in 2022, Renewable UK’s latest report sheds light on the current business models and demystifies some of the consensus around their viability. The capacity for electrolysis is expected to grow significantly, reaching between 175-420 GW by 2030, the UK Government acknowledged this opportunity and set out plans for 10 GW of low-carbon hydrogen production by 2030. According to Renewable UK, there is a potential to leverage up to £11bn in private investment. They also explain that kickstarting this emerging industry will require initial support from the government to de-risk and reduce the financing cost of early deployments. In an attempt to do this, the Hydrogen Production Business Model (HPBM) was introduced as a scheme which guarantees winners in each allocation round a price for the hydrogen they produce over the duration of the contract. Furthermore, it aims to facilitate the discovery of a competitive price for the hydrogen produced in the absence of multiple buyers and sellers, thus stimulating the development of an emerging market.

HPBM HAS COME UNDER SIGNIFICANT SCRUTINY OVER COMPLEXITY Despite well-meaning intentions, the design of the HPBM has come under scrutiny for being overly complex and difficult to navigate for key stakeholders. 8

Renewable UK explained: “As such, the primary aim of this guide is to unravel some of this complexity by offering a highlevel explainer of how it works. Through interviews with industry, we will also shed light on some issues with specific elements within the scheme’s design and provide recommendations to overcome these.” Stripping it back to the CfD fundamentals the report explained that: “Where a generator receives a fixed price (strike price) for their electricity over a fixed term. This revenue stabilisation mechanism is required because renewable projects, like an offshore wind farm, are highly capital intensive and operate in a market that is known for its price volatility. With low-carbon hydrogen being a new market, strike prices are also an attempt to establish a market for the future production, storage and distribution of hydrogen. This has been used in other renewable sectors and has a relatively good track record.

THOSE NOT USED TO CFDS COULD HAVE ACCESSIBILITY ISSUES TO THE HPBM However, for those not used to navigating CfD, there is an additional complexity to the HPBM over the traditional power CfD. There is much excitement surrounding HAR1, which saw 17 projects totalling 262 MW enter direct negotiations with DESNZ in August 2023. It is widely anticipated that these LCHA will be awarded in Autumn. Interestingly, the first HAR1 projects will be looking for FID by the end of 2024, ahead of the second allocation round that will grow capacity to 750 MW.

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BY FLOYD MARCH

CALCULATING THE AMOUNT PAYABLE IS PROVING DIFFICULT

INDUSTRY REACTS TO SPECIFIC PRESSURE POINTS

Naturally, the electricity market is liquid which is underpinned by the networks connecting multiple users. This is the goal for the hydrogen sector but to do this, the HPBM: “Must initially accommodate an emerging market whereby volumes are sold in small quantities via private contracts between producers and users, on private networks.”

A large section of the report focused on the elements of the HPBM that the industry has struggled with and the Renewable UK solution to these problems.

On this, the UK Government has tried to circumvent this by including three elements within the HPBM which attempt to costeffectively determine the final cash flow needed for support. The final cashflow for green hydrogen developers is the sum of these:

Moving to completive auctions by 2025 is possibly the core topic of discussion around the HPBM. Support through the HPBM is currently awarded through evaluation criteria and bilateral negotiations between industry and government.

•Cashflow 1 = Contracts for Difference: Payment to or from the producer, contingent on the reference price and strike price. •Cashflow 2 = Price Discovery Incentive: an additional payment to the producer that seeks a higher sales price. •Cashflow 3 = Sliding Scale Top Up: Implemented to offset volume risk (e.g. an offtaker going out of business)

However, the government has proposed to transition the HPBM allocation rounds to competitive, price-based auctions by 2025. From a Renewable UK perspective: “Implementing competitive auctions too soon without a fully developed supply chain and market players could make it economically unviable for developers to progress their projects.” RenewableUK’s view is this proposal ignores the history of CfDs. “Before competitive CfD auctions were introduced in 2014, for example, fixed-bottom offshore wind had already benefited from years of subsidies, including the ROC and FID Enabling for Renewable (FIDeR) regimes.” 9

“Ultimately the whole package should be reviewed by both the LCCC and DESNZ to understand what they need and what they could remove. One action could be to move all warranties and director certificates to a single annual submission.” This provided business case certainty, allowing early wind projects to trial the technologies, take on higher risk and establish ~4000 MW of operational offshore wind projects before competitive auctions were introduced.

DEMYSTIFYING THE HYDROGEN BUSINESS MODEL FOR ELECTROLYSIS

After establishing the potential issues surrounding completive auctions by 2025, RenewableUK gave their recommendations on this issue. They stated: “RenewableUK recommends that while the market is in its infancy, the allocation mechanism for HPBM contracts should progress through bilateral negotiations, prioritising deployment first and foremost.

To address this, RenewableUK recommended a review to simplify the LCHA. “For example, the level of representations and warranties required, particularly around compliance metering and ongoing and enduring rights of the LCCC to inspect and monitor. There should be technology-specific LCHAs that strip out information that is only relevant to other types of production methods.”

“Until a market with multiple operational projects has been established, the transition to competitive auctions should be deprioritised.

While there were many other recommendations to ease constraints surrounding the HPBM, these two were the highest on the agenda. Whether this will be implemented in HAR2 remains to be seen, but we shouldn’t take away from the positivity of the HPBM and the wider opportunities this could bring to the hydrogen sector.

“For each consecutive allocation round, DESNZ should review against a clear timeline and set of criteria for when competitive allocation should be “triggered.” By doing it this way, DESNZ can gather information on projects to inform auction parameters (e.g. Administrative Strike Price once competitive auctions are introduced).” According to the report, the next element of tension arises from the administrative burden of the LCHA Description. The LCHA contains hundreds of pages that must be navigated, interpreted and filled out by developers. These contracts include sections for different hydrogen production technologies, which means aspects of the LCHA are relevant to some and irrelevant to others.

In contrast, there are currently ~5 MW of green hydrogen projects operational In the UK.

“The guarantee of a fixed price for renewable generators sufficiently de-risks the project allowing for capital investment.”

ISSUE 19

THE MESSAGE OF THE DAY:

Don’t Count Scotland Out of the Decarbonisation Race During the latest Hydrogen Industry Leaders Conference, four messages were of particular note. Those being, the latest Hydrogen Action Plan from the Scottish Government offers hope, we need to make the most from curtailed wind power, a whole systems approach is the best avenue to follow, and Scotland is becoming an increasingly competitive nation as a future exporter. From a Scottish Government perspective, Stuart McKay, Head of Hydrogen explained: “For green hydrogen production we need renewable electricity and lots of surplus electricity. To meet this demand, Scotland has really big plans for offshore wind, with the latest leasing round exceeding 28 GW.” There are lots of wind resources off the coast of Scotland which can be utilised for primary energy production but also green hydrogen production. However, for that amount of power to come to fruition there is a requirement for large infrastructure changes. Adding to this, delegates heard: “Scotland doesn’t need all of this excess electricity, much of this will be exported to the rest of the UK. However, we will also have surplus energy to use for green hydrogen production.” 12

Determined to not stop there, Stuart emphasised: “We will create much more hydrogen than this stipulates, and the action plan sets out a vision that will look at indigenous demand here in Scotland, industrial heat, transport, shipping, aviation, power-to-x, and domestic heating.

WIND POWER HOLDS THE KEY TO UNLOCKING A GREENER FUTURE “Equally, we are working on an export strategy for hydrogen and the places we are targeting include the rest of the UK and northern Europe, particularly Germany who are signalling that they want to import a lot of hydrogen. “We’ve built up a huge evidence base in Scotland to support the policy positions in hydrogen. We are an evidence-based led government which means our Action Plan involved lots of studies, analysis, economic models etc.” On this export potential, the Action Plan explains the ambition is for Scotland to be a leading producer and exporter of hydrogen and hydrogen derivatives for use in the UK

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and Europe, with the first hydrogen delivered from Scotland to mainland Europe in the mid-2020s. The opportunity for Scotland within the developing global hydrogen market is significant. Increasing European demand for alternative energy sources and chemical feedstocks, to reduce dependency on fossil fuels, means that the supply of renewable hydrogen will play a major role not just in the energy transition but in enabling the security of supply across Europe through diversification of fuels and supply sources. The European Union has recently set a target to import 10m tonnes (Mt) of hydrogen by 2030, with recent reports indicating that global hydrogen demand could reach 115 Mt by 2030. Since this plan was announced, Hydrogen Industry Leaders heard about the release of the first phase of the hydrogen backbone, in collaboration with the Net Zero Innovation Centre.

BY FLOYD MARCH

“IT IS PUTTING SCOTLAND ON THE MAP, PEOPLE ARE WAKING UP TO NOTICE THE OPPORTUNITIES FOR THE SUPPLY CHAIN IN THE REGION.”

TENS OF OF NEW J CREATED NORTH SE IS WINDIN

Stuart described the anticipation for the results of the second phase of this programme: “Phase 2 is really exciting because we have German partners working on it now, with the ability to make these projects come to fruition.”

CURTAILMENT CONTINUES TO BE A THORN IN THE SIDE OF PROGRESS Moving on to some of the challenges Scotland is facing on the road to net zero, Fergus Tickell Business Development Lead at SGN set out the issues around optimising offshore wind production and the growing curtailment concerns. “One of the core things SGN are looking at is the optimisation of wind production and how to maximise the recovery of primary energy from wind farms. Green hydrogen has a huge role in this. “SGN recognises that wind curtailment is a huge issue for the renewable sector, the cost of wind curtailment has been just under £800m for this year alone. Wind farms are being paid this to stop generating because the grid lacks the capacity to take it.” This is a complete waste of primary energy which could be used for assets already on the ground. This issue will only perpetuate over time with the continued growth of offshore wind if improvements aren’t made to the grid or ways to utilise this energy aren’t found. 14

Addressing the audience on the steps being taken to tackle this, he explained: “We wanted to look at how wind farm developers could use green hydrogen production to help ease this. We found potential for South West Scotland to use curtailed energy to produce enough hydrogen to decarbonise half of Scotland’s HGV fleet.” If this is replicated across Scotland, hydrogen could play a crucial role in expanding hydrogen production and the implementation of clusters of electrolysers could make the best use of this opportunity.

WHOLE SYSTEMS APPROACH WILL ALLOW SCOTLAND TO MEET ITS POTENTIAL The third key message of the day explored the benefits of working across a value chain and taking a whole system approach to growing the hydrogen economy. Delving into this in more detail, Suzanne Moir, Partner at Addleshaw Goddard explained: “We are delighted to have been appointed as advisers to DESNZ in connection with the markets and regulatory frameworks and development for hydrogen heating. “We are also looking at the subterranean storage of hydrogen in Scotland and the UK, so we are pretty much looking at the whole value chain across the hydrogen sector.

THOUSANDS JOBS COULD BE D AT A TIME WHEN EA PRODUCTION NG DOWN. “The observations and recommendations from the various IEA reports resonate with what Addleshaw Goddard is seeing on the ground.” A recent Addleshaw Goddard hydrogen report expanded on this: “Scotland’s abundant natural resources put it in a strong position in the global race to exploit the potential. Replacing fossil fuels with hydrogen across industries and in hard-to-decarbonise sectors such as transport could turbo-charge the nation’s progress towards net zero. To do this, however, Suzanne insisted: “The different pieces of the hydrogen puzzle are starting to take shape in Scotland, but bold and decisive actions from government, industry and funders are now needed to bring the picture together.”

IS THE UK STILL COMPETING AGAINST THE US AND EU?

This was echoed in the second panel debate of the day, where Marie Carruthers - Technical Manager at Marubeni addressed the audience: “Recently, Marubeni has signed a memorandum of understanding with the UK government where we pledged to invest £10bn in renewable energy projects. “There are lots of things that are attractive about investing in the UK, Scotland in particular, the Government’s commitment gives us longevity and foresight. There is also a good skills force here with the crossover with the gas and oil sector.” Stuart rounded up the session by explaining despite other funding avenues such as the IRA and EU support: “The UK has a different approach with the CfD which I think gives longevity and when totalled up becomes a huge investment. What we can offer here is proximity to the market mainly, Northern Europe.”

“WE WILL NEED HYDROGEN FOR DIFFERENT THINGS, A THIRD OF OUR ENERGY MIX COULD BE HYDROGEN BY 2045.”

ISSUE 19

HOW CAN HYDROGEN ACCELERATE THE DECARBONISATION OF RAIL?

The rail industry has a significant role to play in accelerating towards the UK’s net zero goal and can be both an enabler of reducing carbon emissions through promoting modal shift and reducing its environmental impact through a programme of rapid decarbonisation. Arcadis’ new report explores how rail can achieve this.

Between 2013 and 2019, 747 km of electrification works were completed, and only 2.2 km from April 2021 to March 2022. The volume of committed future electrification schemes shows only a modest acceleration of this rate, pointing towards a significant shortfall against the 2040 decarbonisation target.

Currently, only 38% of the UK’s rail network is electrified, meaning the majority of routes are reliant upon diesel trains. Network Rail’s 2020 Traction Decarbonisation Network Strategy sets out an aspiration to remove diesel trains from the network by 2040, and makes a series of recommendations for how this is best achieved.

IMPLEMENTING HYDROGENPOWERED RAIL WON’T REQUIRE A LOT OF INFRASTRUCTURE UPGRADES

CONSTRUCTION OUTPUT MUST INCREASE TO MEET THE UK’S DECARBONISATION TARGET To deliver the stated volume of new electrification in time for the 2040 target would require a considerable increase in the construction output achieved in recent years. 16

Further to the issue of how achievable such a high volume of new fixed electrification is, there are also questions around the economic and the environmental cost of all the new infrastructure. The price of fixed electrification can vary significantly depending on the complexity and topography of the route where it is being deployed. Alternative fuel solutions, such as battery and hydrogen, require far less in terms of upgrades to the existing rail infrastructure.

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With momentum building towards hydrogen playing a more significant role in decarbonising the energy and transportation sectors, there are opportunities for this technology to play a much more substantial role in helping to remove diesel trains from the UK network.

HYDROGEN LOOKS TO BE A VIABLE RAIL DECARBONISATION SOLUTION WORLDWIDE Currently, there are no hydrogen trains in timetabled use in the UK. Therefore, the UK does not have a precedent for how hydrogen train operations should be best deployed and the many safety case and operating procedures that would be required are yet to be developed.

BY TOM CONSTANTINE AND PAUL ASPINALL

Hydrogen has been safely used in industrial processes for decades, and in recent years has been deployed to decarbonise UK bus transport in cities such as Aberdeen, Birmingham and London.

DIESEL COSTS ARE EXPECTED TO INCREASE In the year 2021/2022, UK franchised operators spent £300m on diesel, an annual increase of 30%, which excludes all rail freight diesel costs. Diesel costs are expected to increase, as indicated by the projected oil costs identified by BEIS in their BEIS 2019 Fossil Fuel Price Assumptions document.

However, Saxony in Germany can be used as an example. In 2022, it commenced on an operation of a hydrogen-powered commuter service using Alstom’s Coradia iLint model, with a 1,000 km range, saving 1.6 million litres of diesel annually. Although the operator in Saxony recently announced it will not further expand the use of hydrogen trains, citing the cheaper operation of battery/electric models on its significantly more electrified network compared to the UK, Alstom has already sold 41 hydrogen-trains in Europe. This illustrates that there is no single answer to decarbonising rail operations.

GOVERNMENT REGULATION ON HYDROGEN NEEDS TO BE DEVELOPED Using hydrogen as an alternative to fixed OLE will require new and adapted distribution, storage and refuelling equipment. Locating hydrogen-powered rail routes near areas of renewable generation will allow for production of green hydrogen using curtailed electricity. In addition, with no hydrogen-powered rail services in use in the UK currently, regulation and safe working practices will need to be developed and implemented in order to commence operational use of hydrogen trains.

CURRENT AND FORECASTED DIESEL COSTS (ADAPTED FROM BEIS, 2020) Trying to compare the cost of fuel for a diesel train fleet vs a hydrogen one is difficult, given the variation in rolling stock types, efficiencies and service patterns. The ORR now publishes the total cost of diesel used on the network on an annual basis, but this is not represented in terms of costs per vehicle km, though in 2018 the ORR assessed this to be £0.52 per vehicle mile. Taking the indicative 47% increase in fuel cost over this time, the cost of diesel per vehicle km is likely to currently be in the region of £0.77 per vehicle mile.

COSTS OF HYDROGEN ARE LIKELY TO REDUCE WHEN CONFIDENCE IN THE TECHNOLOGY IS GROWN 17

Current costs for green hydrogen are variable, though are assessed by the European Commission to currently be £2.40 - £5.20 per kg. If an average of this is taken, this would give a fuel cost per vehicle mile for a hydrogen train to be on parity with diesel (based on a consumption of hydrogen at 0.2 kg per vehicle mile as quoted by the RSSB). With green hydrogen projected to rapidly fall in price and the likely increase in diesel costs, hydrogen trains may imminently be cheaper to fuel than diesel. The cost of fuel is not the only barrier to overcome when it comes to the hydrogen transition, as hydrogen trains are significantly more complex than diesel, so currently cost more to maintain, and have a higher upfront cost in providing the upgraded fuelling and distribution infrastructure needed to run a hydrogen service. However, these costs will reduce as the industry becomes more familiar with the technology and with increasing adoption, and as the gap widens between the unit price of diesel and of green hydrogen, the payback period for the upfront investment to upgrade infrastructure will reduce.

HYDROGEN IS NOT THE SILVER BULLET FOR DECARBONISING RAIL The rail industry plays an important role in helping the UK Government meet its ambition of achieving 10 GW of low-carbon hydrogen production by 2030. By adapting a relatively small number of existing rail servicing depots, the rail industry can provide low-carbon transport to large numbers of the population, with significantly less new infrastructure than with new fixed electrification. Strategically, hydrogen rail refuelling depots would be located at existing rail refuelling depots, commencing near Project Union or Regional Clusters to maximise the impact of accelerating the synchronisation of supply/ demand for hydrogen, strengthening the business case for all parties. The current state of output for fixed electrification is far short of what would be needed to remove diesel from the rail network in the timeframes necessary for the UK to reach net zero. 18

A mix of strategies and energy vectors are required to decarbonise and remove diesel from the UK rail network. Hydrogen does offer a compelling case as a means to decarbonise. The integration of hydrogen, battery, and electrification as complementary technologies can rapidly accelerate this decarbonisation and help to achieve the 2040 target to remove diesel trains. By implementing this in a strategic manner, aligning renewable electricity generation with the location and proximity of hydrogen production facilities, and utilising rail freight distribution of clean fuels to enable hydrogen rail refuelling at scale, the UK could see a step change for decarbonising its rail network and associated industries.

FIXED ELECTRIFICATION VS LOCALLY GENERATED GREEN HYDROGEN – A CASE STUDY The North Wales Main Line (NWML) is a 2-track railway running 170km from Crewe to Holyhead along the North Wales coast, which has long been identified as a candidate for electrification, most recently at the Conservative Party Conference in October when Rishi Sunak included it in a long list of potential infrastructure projects that may see funding diverted from the cancelled Northern leg of HS2.

The route has a challenging topography, and heritage constraints, so can be considered as moderately complex for traditional electrification, and hence would be in in the mid/upper range of the typical cost per STK. With recent levels of inflation, an indicative cost is expected to be the region of c£1bn. From an environmental perspective, the embodied carbon for fixed OLE on the NWML would be the equivalent of over 33,000 tonnes of CO2e based on the RSSB figures for embodied carbon of upgrading existing lines to OLE. This alone is hard to put into perspective, but we are able to compare it to the impact of the current diesel operations on the line. The ORR give an average figure for emissions from diesel passenger trains at 1.4kg CO2e per diesel vehicle km. With the total daily mileage on the NWML being approximately 12,000km, and assuming the average train on the route consists of 3-vehicles (a combination of 5-car cl 221s and 2/3 car TfW DMUs), the total operational annual CO2e emissions from the NWML is c18,000 tonnes per year. This means upgrading the line to OLE would produce embodied carbon emissions equivalent to approximately two years worth of diesel operations, which is not insignificant when considering the short timescales with which we need to decarbonise the transportation sector and the wider economy.

The adaption for safe use in rail is a Therefore, in the example use-case of the North Wales Mainline, sufficient electrolysed logical extension green hydrogen could be generated via an array of 14 wind turbines. for the wider renewable energy capacity increasing decarbonisation of With at pace globally, green hydrogen production be an effective way to store large volumes mobility solutions. can of excess (curtailed) energy production which

into account varying wind-speeds) means that a single turbine would on average produce c16MWh per day.

North Wales is also geographically well suited for the use of renewable energy to generate green hydrogen locally through electrolysis, which would minimise the necessity to transport the fuel over long distances. The current maximum speed of the NWML at 90mph also aligns with typical maximum speeds for current hydrogen train technology. According to the RSSB, the typical fuel consumption from a hydrogen powered train is 0.2kg of hydrogen per vehicle mile, and based on the current daily service pattern on the NWML would require an indicative daily demand of 4.5 tonnes of Hydrogen to operate. Based on current electrolyser technology performance, generation of 4.5t of green hydrogen would require 225MWh of electrical input per day. Typical off-shore wind-turbines in use today, such as each of the 160 turbines in use at the Gwynt y Môr array in North Wales, have a capacity of c3.6 MW, which when considering a capacity factor of 30%-40% (the average amount of power actually generated taking

would otherwise go to waste at times of low grid demand.

Curtailed electrical generation at times of high production and low demand, can reach significant levels. Across the UK Between 2017 and 2021 there was an annual average of 2.2TWh of wind generation curtailed, and given it takes c50kWh to produce 1kg of hydrogen through electrolysis, this energy could have generated 46,000 tonnes of hydrogen per year. With current hydrogen prices at c£10/kg, that’s a potential value of £460m per year. When you consider the amount of curtailed energy already going to waste, and the pipeline for new renewable generation, it may not be necessary to build new renewable energy provision specifically for rail operations. The North Wales coast is a high-potential zone for renewables, currently hosting over a third of Wales’s renewable energy capacity, with 726 MW of offshore wind via 215 turbines across 3 sites, 98MW of onshore wind and 224 MW of solar, all of which are set to increase.

HYDROGEN, LIKE SAND, GETS EVERYWHERE. ENGINEERING AND MATERIAL CRITICAL ASSESSMENT TO PROTECT YOUR ASSETS FROM HYDROGEN DEGRADATION • Global Expertise across a Network of 9000+ staff in 280+ Locations Worldwide • Modelling and Simulation of Critical Assets • Static and Dynamic Fracture Mechanics in Hydrogen Environments • SSRT Testing • Non-Metallics Permeation Assessment • Europe Leading Testing Capacity Mark Eldridge Director of Hydrogen

+44 (0)7827 926757 mark.eldridge@element.com 21

IMAGE SOURCE: REUTERS.COM

ISSUE 19

HOW TO NEGOTIATE A LONG-TERM GLOBAL COMMITMENT TO HYDROGEN

In order to make the energy transition a successful one, there must be a collective commitment to fossil fuel alternatives, which we are seeing more and more of in recent years. For hydrogen to step up as a serious contender, it needs enough backing from key players around the globe to properly take off. As we look towards 2024, Hydrogen Industry Leaders spoke to David Sanders, clean energy expert, and Rhys Vigna, hydrogen derivatives expert, of PA Consulting, to ascertain the current level of commitment to hydrogen as it positions itself as a serious contender amongst alternative energy sources. Over the past few years, the context around energy production, importation, and reliability has changed massively. In February 2021, when Russia invaded Ukraine, European nations including the UK were forced to confront the reliability of their own energy dependence, and had to think quickly about how to improve the security of their supply. As of the end of this year, a total of 41 governments from around the globe now have a hydrogen strategy in place, according to the IEA’s Global Hydrogen Review 2023. It’s clear that momentum is picking up, and 22

David noted the importance of global uptake. He said: “This has become a global issue on how do you decarbonise and how do you get security of supply. Both the Inflation Reduction Act (IRA) in North America and all the EU policy instruments have become critical to driving the hydrogen economy, and also signs that actually, at a policy level, the politicians are really upping their game and trying to drive the market and the hydrogen economy at a high level. “We’re seeing a lot of countries outside of Europe and North America. Japan has always been a significant player here, as has Korea, and both those countries are actively pushing the hydrogen economy. “And then you’ve got countries where you can make green hydrogen and green ammonia cheaply that are also developing the hydrogen economy, like Australia, Chile, the Middle East, Namibia, Brazil, North Africa. They’re all becoming much more active in manufacturing, producing hydrogen and ammonia for exports to Germany, Japan, Korea.”

POLICY IS THE MOST POWERFUL DRIVER OF THE HYDROGEN ECONOMY

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Last year’s most impactful hydrogen policy decision was the IRA, introduced in August in North America, and designed to incentivise investment by authorising a tax credit for hydrogen producers worth up to $3 per kilogram. Rhys explained that the IRA has remained a very prominent influence through 2023, but also noted the new policies coming through in the form of the EU fit for 55, which was formally introduced in April 2023, and has made the goal of reducing EU emissions by at least 55% by 2030 a legal obligation. Describing the legislation as ‘the biggest thing that’s happened in the last 12 months’, Rhys commented: “It’s getting people a firm footing to move forward on and understand what the lay of the land, and what those incentives look like.” While policy plays the biggest role in incentivising and boosting confidence in hydrogen, Rhys also acknowledged the NEOM Project, which was officially announced in May 2023. To date, it is the world’s largest green hydrogen production facility at a total investment value of $8.4 billion. “That’s significant because it is the first example of a project of this kind actually going ahead,” Rhys said. “NEOM are very, very active in making sure that they’re developing markets around that, and I think that’s going to be very enabling for the broader hydrogen economy.

“THE TIDE LIFTS ALL BOATS WHEN IT COMES TO DEVELOPING THESE KIND OF MARKETS.”

20 24 BY HANNAH WINTLE

WHAT IS THE OUTLOOK FOR 2024?

Based on the current momentum and the need for hydrogen energy as we reduce our reliance on fossil fuels, the long-term future for hydrogen looks bright. David said: “Taking a step back, in the long-term, the hydrogen economy will be huge. It will be somewhere between three times market size today and seven times market size by 2050, so it is going to be huge.” However, David conceded that the economic and technical challenges of the last couple of years have seen the market develop at a slower rate than anticipated, and this is likely to bleed into 2024, too.

“I think in 2024, we’re still going to see a slower take up than a lot of the policymakers and companies would ideally like because while the financial incentives are starting to come into place, the technology development is still not there.” Rhys added that the increased clarity around policy observed this year will go on to encourage growth in the sector, though he concluded that time and patience is a factor at play. “Hydrogen and derivatives are a critical part of the energy transition moving forward. It’s something that we just need to give a little bit of time. We are very much at the beginning of that journey right now. But as they mature, we’re going to see a lot more happening in this space.” 23

ISSUE 19

PODCAST WRITE UP

EAST MIDLANDS HYDROGEN I wondered if, to start, you could give me a brief overview of East Midlands Hydrogen and your respective roles there? Will: Yeah, essentially, we’re a partnership committed to hydrogen as a major part of the net zero future of the UK, and we’re a partnership of public and private sector bodies, education bodies, drawn up from across the East Midlands. But we all see that hydrogen might not be the whole solution, but we see it as a really crucial part of the solution for our patch. And we also think that potentially there are people in Whitehall say, who might not yet have picked up on the real potential of our parts of the world. How would you put it Sally? Sally: Exactly, so East Midlands Hydrogen is led by eight different organisations, but we’ve got more than 40 different organisations who are supporting it, and these are hydrogen 24

producers, hydrogen customers, and then hydrogen technology providers in particular. East Midlands Hydrogen is effectively seeking to really accelerate the hydrogen economy development in the East Midlands and we’ve got some really exciting things already going on within the region, particularly on production, distribution and demand, where we really think government needs to know about this new inland cluster. Obviously the East Midlands played such a heavy role in England’s industrial revolution, so how is the region’s venture into hydrogen energy preserving this legacy? Will: It’s really interesting isn’t it? Because we’re 200 years and a little bit on from the first Arkwright Mill opening in Derbyshire, which was a sign of the first industrial revolution, and it happened here because of that coincidence of water and coal across the Midlands. You’ve got the Severn Valley over in the West, you’ve

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got the Trent and Derwent over in the East, and that led to this massive investment in the first mills, and since then things like the six power stations we’ve got along the Trent and they’ve evolved over the years to be fantastic facilities now with huge grid connections and water access etc. And history’s almost kind of flipped from those power stations being created because the coal was here, when now we’ve got those assets, we’re looking around thinking, ‘Oh’, you know, they could be the places that produce the fuel that then goes back out to Derbyshire, Nottinghamshire, Leicestershire, and start to fuel some of our big businesses. So what could have been seen as a decaying and just postindustrial eyesore or burden, is becoming a real asset for our patch in ways that we would never have foreseen twenty years ago. From your perspective, what is the UK’s hydrogen landscape looking like? And to add to that, what more needs to be done to bolster the UK’s hydrogen efforts? Sally: There are loads of things that we could talk about that are going on, or visibly not going on at the moment in the hydrogen economy. I suppose perhaps it’s summed up by some work that was done by Hydrogen UK recently on the UK’s position in terms of the hydrogen economy, and we were originally

in pole position. So we were number one, we were leading it. And it’s been shown recently, according to Hydrogen UK’s work, that we’ve slipped back into sixth position. So there’s a bit of a slowing down going on. Things like America’s Inflation Reduction Act has opened up billions of dollars effectively for investment in things like lowcarbon hydrogen. And, whilst there’s lots of ambition in the UK, there’s big numbers being published, things are a bit slow and potentially sort of slowing down. So I think that would be my message, that we need to keep the momentum up. We need to make these announcements. We need to give investors certainty. All while, though, we’ve got an awful lot of opportunity to go at in the East Midlands and we’ve got programs already underway. We’ve got all this engagement going with industry who want hydrogen. We’ve got a pipeline program on development, we’ve got a growing number of forecasts in hydrogen production and a mechanism through the hydrogen allocation round. We’ve got subsequent rounds which can be applied for on the production side. So we’ve got an awful lot to go at and not being linked to CCUS. So we’re just going to keep going. 25

ISSUE 19

INTERNATIONAL PROJECTS In this month’s round-up of international projects, hydrogen industry leaders delves into the latest updates from France, Portugal, Australia, and the Continent of Africa.

RESEARCH TO ENHANCE PEM ELECTROLYSIS UNDERWAY

ACCELERATING GREEN HYDROGEN INFRASTRUCTURE ACROSS AFRICA

Starting in France, a partnership agreement between Elogen, the French National Centre for Scientific Research (CNRS), and Université Paris-Saclay, will establish a joint research laboratory to accelerate the large-scale production of green hydrogen.

Moving on, an agreement between Getech and Leibniz Institute for Applied Geophysics (LIAG), a partner in the HyAfrica consortium, will accelerate the exploration and development of white hydrogen resources in Africa.

The laboratory, which will be based at the Orsay Institute of Molecular Chemistry and Materials (ICMMO – CNRS/Université Paris-Saclay), aims to improve current PEM electrolysis processes and explore the use of the different materials available in quantity.

Natural hydrogen deposits will be sought after in Morocco, Mozambique, South Africa, and Togo, while the economic and social impact is assessed, with any findings going on to shape strategic plans for hydrogen as an energy source.

ICMMO’s team for Research and Innovation in Electrochemistry for Energy will supply a scientific expertise in PEM water electrolysis, hydrogen storage and purification, which will be complemented by Elogen’s proficiency in the design, manufacturing and marketing of electrolysers.

As a world-leading locator of subsurface resources, Getech will support HyAfrica’s research efforts through the three-year project, which is already underway.

Jean-Baptiste Choimet, Managing Director of Elogen, said that they are proud of the collaboration, adding: “With R&D and innovation forming part of Elogen’s historical DNA, it is only natural for us to recommit ourselves to R&D and the training of the next generation of researchers.”

Getech will contribute to the project through its potential fields data, machine learning capabilities, and market-leading subsurface resource prediction capabilities in the search for natural hydrogen throughout the continent. Max Brouwers, Getech Chief Business Development Officer, said: “Natural hydrogen is an emerging clean energy resource with immense potential to contribute to the global climate challenge, offering clean power and only water as a byproduct.”

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SALES CONTRACT ENTERED BETWEEN FUSION FUEL AND EUROPEAN COMMISSION

PROVINCE RESOURCES IS DEVELOPING AN 8 GW GREEN HYDROGEN PROJECT IN WESTERN AUSTRALIA

Thirdly, Fusion Fuel has entered into a sales contract with a Portuguese energy company for a 1.25 MW electrolyser.

Finally, Province Resources is developing an 8 GW green hydrogen project in Western Australia and has secured additional state licences for more than 600,000 hectares of land. How will this boost green hydrogen production in the country?

The HEVO-Chain Series NC electrolyser system will be used for an integrated electrolyser and hydrogen refuelling project which had been awarded European Commission funding through Component 14 of Portugal’s Recovery and Resilience Plan. It is aiming to produce, store, and distribute green hydrogen for both light and heavy transport sectors. Fusion Fuel has said that the facility is planned for the north of the country and is expected to be fully installed and operational before the end of 2024. Fusion Fuel’s Head of Portugal, Pedro Caçorino Dias explained that it will bring its existing expertise to the project: “Our ability to design an entire hydrogen plant, in addition to our modular electrolyser approach, allowed us to execute this agreement in record time, a testament to our cutting-edge technology and our capability to deliver.

Originally announcing its 8 GW HyEnergy project in 2021, this week Province Resources has revealed it has now secured enough licences to support initial development. Though the company is still in the feasibility phase, it is aiming to produce 550,000 tons of green hydrogen per annum, with the first stage of the HyEnergy project to include 4 GW to 5 GW of solar and wind for its electrolysers. The licences include more than 864 hectares of the seabed near Carnarvon, allowing the company to complete detailed feasibility studies into building a port for green hydrogen export. Currently, the company is exploring two different export options. The first is a traditional loading jetty port. The company’s proposed port would be located about 20 km north of Carnarvon.

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